“Discoverability” Principle may Extend 2 year Limitation Period to Enforce Italian Judgment in Ontario: Sicilian Maceri Services v. OGO Fibers Inc., 2018 ONSC 1342 (CanLII)

Until the Court of Appeal for Ontario released it’s recent decision inIndependence Plaza 1 Associates, L.L.C. v. Figliolini 2017 ONCA 44 (CanLII), the limitation period applicable to actions to enforce foreign judgments in Ontario was under considerable doubt.  Thankfully, the court in Independence Plaza set out a clear and predictable standard, as I summarized in one of my previous Bulletins:

  • A 2-year limitation period applies to a proceeding on a foreign judgment, and
  • The limitation period begins to run, at the earliest, when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision. The time maybe longer if the claim was not “discovered” within the meaning of section 5 of the limitations Act, 2002, until a date later than the appeal decision.

Recently, in Sicilian Maceri Services v. OGO Fibers Inc., 2018 ONSC 1342 (CanLII), Justice Fragomeni was called upon to deal with the application of the limitation period to a situation where “discoverability” of the claim may be in issue.

In Sicilian Maceri the Defendant brought a motion under Rule 21 of the Ontario Rules of Civil Procedure to strike out, stay or dismiss a Statement of Claim to enforce an Italian Judgment in Ontario as a result of the expiration of the 2-year limitation period.  The motion was brought prior to the Defendant submitting its Statement of Defence.  Under Rule 21.01(2) no evidence is admissible under such a motion, except with leave of a judge:

Rule 21.01(1)(a)(b) and (2) of the Rules of Civil Procedure states:

21.01 (1) A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,

(c) and the judge may make an order or grant judgment accordingly.  R.O. 1990, Reg. 194, r. 21.01 (1).

(2) No evidence is admissible on a motion

(a) under clause (1) (a), except with leave of a judge or on consent of the parties;

(b) under clause (1) (b).  R.O. 1990, Reg. 194, r. 21.01 (2).

Although no evidence is admissible on a R. 21.01 motion, the facts set out in the

Statement of Claim are presumed to be true for the purposes of the motion.  The Court pointed out that in this case the following facts were pertinent:

  • in 2013 the Plaintiff and the Defendant had a series of business dealings with each other;
  • on January 24, 2014, the Plaintiff commenced legal proceedings in Italy against the Defendant;
  • on March 10, 2014, the Plaintiff obtained an order from an Italian judge for 41,420 Euros plus costs and expenses;
  • the order was amended on March 19, 21014, allowing the Defendant 60 days to appeal the order.  No appeal was taken of the order by the expiry of the 60 day period on May 19, 2014;
  • on December 4, 2014, the Plaintiff obtained a “Decree of Enforceability” from the Italian Court;
  • no appeal was available after the enforcement order was issued.
  • the Italian Court judgment was final and conclusive.
  • on May 15, 2017, the Plaintiff issued a Statement of Claim in Ontario to enforce the 2014 Italian Court judgment.

The Defendant relied on the fact that more than 2 years had elapsed between December 4, 2014 (the Italian Decree of Enforceability) and the May 15, 2017 (Statement of Claim issuance). On the motion, the Defendant argued that the test for obtaining relief under R. 21.01 was met in that it was “plain and obvious” on the facts plead in the Statement of Claim that the limitation period had expired.

The Plaintiff’s position was that the Defendant’s motion was premature and that it is not “plain and obvious” that the Plaintiff’s claim was statute barred.  The Plaintiff further argued that the Defendant should be required to file it’s Statement of Defence pleading the limitation defence.  This, in turn, would provide the Plaintiff with procedural fairness as it would have the opportunity to file a Reply setting out additional facts responding to the limitations defence.”

Ultimately the court agreed with the Plaintiff that the Defendant’s motion was premature in that additional facts may be plead by the Plaintiff in its Reply after the Defendant put its position forward in its Statement of Defence.  Assuming that the Defendant will plead expiration of the limitations period as a defence, it will now be open for the Plaintiff to plead material facts in its Reply related to the “discoverability” principle in s. 5 of the Limitations Act.

The Defendant’s motion was dismissed and the Defendant was ordered to deliver its Statement of Defence within 30 days. The Plaintiff was ordered to deliver it’s Reply in accordance with the Rules of Civil Procedure.

Takeaways from This Case:

  • The Standard 2-year limitation period applies to actions for the enforcement of foreign judgments in Ontario.  However, the discoverability principle in s. 5 of the Limitations Act also applies.
  • Where discoverability is an issue and there is the possibility that additional facts could be pleaded in this regard, a Rule 21.01 motion ought not to be brought before the close of pleadings.

Sicilian Maceri Services v. OGO Fibers Inc., 2018 ONSC 1342 (CanLII)

Jon-David Giacomelli

Jon-David Giacomelli is a Canadian lawyer and an internationally known leader practicing in the area of the recognition and enforcement of foreign judgments and arbitral awards in Canada.